Is this way too deep?

[admin]

Is this way too deep a hole to be stuck in? A small sized plastering business I know is due the bank a €10k loan while awaiting payment on completion for €50k on a 90 day invoice with a notoriously slow paying customer.

They are already past the point of no return and if the contractor doesn't pay up, it's all over for them. They knew the risks involved while tendering so should they have taken the contract on in the first place?

[TonyM]

Way too deep. I'll go a grand or 2 weeks with a new customer, before I want some dosh. Even my best customers only get £5K credit from me. If someone rings me out of the blue, that isn't known to me, or one of my customers, it's unlikely i'd do work for them.

[amestaper]

No chance, but it's theirs (and the banks) risk and fortune favours the brave so good luck to them. I once went into a fair sized deficit and got my ...... to cut a long story short, I paid dearly and learnt my lesson. The most important thing is to make sure you get paid!!
Strangers get around a fortnight, and I want paid on completion although I will run a few background checks and make sure they don't have a bad rep. The most I've been due in the last year from a well known and trusted client was over 9 grand but I knew they were honourable. Couldn't afford to do that this year unfortunately.

[the_tapeinator]

A lot of compnies you wouldnt expect are up to their necks in it and always live in overdraft. They maybe should have asked for staged payments such as 30% at start ,30% during, and 40% on completion so they wont be crapping themselves at the prospect of non payment.

[belmoreboy]

Is this way too deep?

Yes and No really !! With a contract of this size you would need to be strict with monthly valuations, have a golden rule that we always sit down week before valuation dates are due and make sure we have all relevant paperwork handy so valuation dates never missed.

It's always good with larger contracts to tie builder or main contractor into fixed valuation dates before you start - keeps the money flowing and gives you the chance to spot if youre not gonna get paid on time if they don't agree to monthly valuations. (i'm guessing the company mentioned was working for longer than a month to be 50k in the red?)

We have found lately that a 2-5% monthly settlement discount usualy puts your invoice at the top of the pile when the cheques are being signed!